Low wages test loyalty to Singapore ruling party

By ALEX KENNEDY | May 25, 2012 | 9:17 AM EDT

A man is silhouetted against the skyline of a luxury brand outlet and the financial district of Singapore Thursday, May 24, 2012. Singapore's inflation rate rose to a fourth-month high in April as housing and transport costs soared. The central bank said in a statement Wednesday that the consumer price index increased 5.4 percent in April from a year earlier, up from 5.2 percent in March. (AP Photo/Wong Maye-E)

SINGAPORE (AP) — Khamis Neshbahri earned a salary of 700 Singapore dollars ($550) a month when he began cleaning office buildings 11 years ago. His wages haven't budged since then while his cost of living has continued to climb.

The 32-year-old Singaporean's waning purchasing power has pushed him to work nights and weekends to boost his pay, and he wants some relief from Singapore's wealthy but tightfisted government.

Cleaners such as Neshbahri are part of a working poor that often go unseen by tourists dazzled by the Southeast Asian city-state's sparkling downtown, Orchard Road shopping strip and two new casino resorts. But stagnant wages, weighed down by a flood of cheap foreign labor, are tearing at a social compact that has allowed the People's Action Party to govern Singapore almost unchallenged for five decades.

"Working everyday can make you a little crazy sometimes, but my family depends on me," said Neshbahri, who supports his wife, mother-in-law and baby son. "The government should make companies pay us a decent wage."

Voters on Saturday will have their third chance in a year to voice their discontent as tiny Hougang district holds a by-election. The district has been held by the opposition Workers Party since 1991 and the PAP acknowledges its chances of winning are low.

The PAP was stunned when it won just 60 percent of the vote in parliamentary elections in May last year, the lowest total since Singapore split from a short-lived federation with Malaysia in 1965. Support of that magnitude would count as a resounding victory in a Western democracy but the swing to opposition parties was a slap in the face for the PAP, which controls 81 of 87 seats in parliament.

The ruling party suffered further embarrassment when the candidate it backed for president — a largely ceremonial post in Singapore's parliamentary system — won by less than 1 percentage point with 35 percent of the vote.

Manufacturing, finance and tourism have helped Singapore create immense wealth but it does not have a minimum wage and is one of the world's most expensive cities. According to the Boston Consulting Group, 15.5 percent of Singapore households have at least $1 million of liquid assets, the highest percentage in the world.

Amid this opulence, income inequality is growing and working class Singaporeans are becoming restless with what they see as an unfair distribution of the nation's wealth, said Terence Lee, an assistant professor of political science at National University of Singapore.

"The deal with the PAP has always been: Leave the politics to us, we'll take care of your bread-and-butter issues," Lee said. "But if the regular Joe isn't being taken care of, the government's popularity is in real jeopardy."

Singapore has a per capita income similar to Denmark, Finland, and Sweden yet in those Scandinavian countries cleaners are paid on average up to seven times more than in Singapore, according to a study by Tommy Koh, a Singapore Ambassador-at-Large and special adviser to the Institute of Policy Studies, a think tank.

Since last year's election, the government has fought off calls to implement a minimum wage or mandate salary hikes, insisting higher pay must only come through increased worker productivity. Prime Minister Lee Hsien Loong earlier this month rejected a proposal by a former chairman of the national wages advisory council to raise salaries of the lowest 20 percent of earners by 50 percent over the next three years.

In an era of soaring debt levels and out-of-control spending in many Western countries, Singapore is proud of its frequent budget surpluses and low public debt. The government has traditionally resisted institutionalizing public benefits, preferring one-time, targeted subsidies for groups such as the elderly, students or the poor.

"Although we want our workers to earn more, we cannot simply push up Singaporean wages as we would like," Lee said in a statement on his Facebook page. "The only way for our workers to do better is to compete on knowledge and innovation, upgrade our skills, and stay ahead of the pack."

However, there are signs the government is buckling to pressure to boost wages.

Manpower Minister of State Tan Chuan-Jin said in parliament last week that it was "unacceptable" that salaries of cleaners, after accounting for inflation, have fallen 2.7 percent during the last decade.

He said the government will soon unveil a plan that requires cleaning companies to pay workers an "appropriate" salary. The national wages council made up of representatives from government, business and government-sanctioned unions this week made a nonbinding recommendation that pay for workers earning less than SG$1,000 a month be boosted by $SG50.

That help can't come soon enough for cleaners like Tan Chuan Peng, a 45-year-old Singaporean who works from 5 a.m. to 3 p.m. at up to five part-time cleaning jobs to make a little more than SG$1000 a month.

"My friends and co-workers are unhappy with the government because things are so expensive," said Tan, whose three young adult children share a bedroom in her apartment. "We can't take it."

"The government cares more about those who are rich and educated," said Tan, who dropped out of school at 12 to work full-time. "They only care about low-wage workers during an election, and then they forget about us."

Wages in Singapore, even for the lowest-paid workers, are higher than in many neighboring Asian countries. This is what attracts so many foreign workers from nations such as China, the Philippines and India.

But housing prices have jumped more than 70 percent since 2006, and the island nation also imports almost all of its fuel and food, leaving it vulnerable to global price shocks.

The annual inflation rate was 5.2 percent in March while the government expects economic growth of between 1 percent and 3 percent this year.

Until 2010, the government sought to boost economic growth by allowing a surge of foreign workers, who now account for about a third of the work force. Chastened by a fierce anti-foreigner backlash among Singaporeans frustrated by crowded public transportation and soaring costs, the government has pledged to slow the flow of immigrants while also arguing they are necessary for growth.

Businesses insist it's difficult to find Singaporeans willing to do low-paying, labor-intensive jobs. Soo Poh Kern, who owns a religious goods importing company, says three of his 10 employees are from China because locals tend to be "too choosy."

"Singaporeans don't like to work overtime or on weekends," said Soo, who pays his workers between SG$1,200 to SG$1,600 a month. "Foreign workers are happy to work overtime because they are only here to make money."